REC considering permanent PV plant closures

Due to the continuing weak solar market conditions and "significant" negative cash flow, REC is considering the permanent closure of three wafer facilities and one cell plant in Norway. Around 700 employees are expected to be affected.

A total of 775 MW of REC's annual wafer capacity and 180 MW of its solar cell production is expected to be dropped. Image: REC.

In a statement released, the company said that the board of directors has "resolved to initiate a process, including formal deliberations with the employee representatives to assess permanent closedown of parts of the production capacity in Norway."

A final decision is expected within the next one to two months, Mikkel Tørud, VP & IRO for the Renewable Energy Corporation ASA told pv magazine. He added that until now the Norwegian government has, as part of its temporary layoff scheme, compensated the company's employees.

The facilities under consideration are the two multicrystalline wafer plants at Herøya and one at Glomfjord, and the solar cell plant in Narvik. If they go ahead, the closures would see 775 megawatts (MW) of REC's annual wafer capacity or 45 percent of it wafer capacity in Norway, and 180 MW of solar cell capacity lost.

In terms of what REC will do with the facilities and their equipment, Tørud said that no decision had yet been made. He explained that the company would have to evaluate the options.

The company did say that work would continue at its two newest multicrystalline wafer plants at Herøya, which has a 650 MW annual capacity and at its 300 MW monocrystalline plant in Glomfjord.

"REC works intensively to improve operation and reduce costs at these facilities, and positive cash flow continues to be the main criteria for continued operation," said the statement.

The company’s integrated wafer, cell and module facility in Singapore, where it has an annual photovoltaic module capacity of 700 MW and its 19.000 MT U.S. polysilicon facilities will reportedly continue to operate at full capacity.

"This is an unfortunate, but necessary step in the current market environment. We are mindful of the impact the potential closedowns will have on the affected employees and the local communities in Norway. This is therefore not a decision we take lightly," stated Ole Enger, president & CEO.

He continued, "We are currently working hard to regain the competitiveness of our remaining Norwegian operations. In this challenging market conditions, I am pleased to see that the good development in our Singapore wafer, cell and module production and in our U.S. polysilicon production. This gives us a foundation for the future."